November 2004

November 30, 2004

Mary Jo Foley notes Microsoft's foray into blogging is due to launch this week, MSN Spaces:

Some users have been speculating that MSN will allow users to post to their blogs
via MSN Messenger 7, the latest version of Microsoft's consumer
instant-messaging client, which is in beta now and due to ship in early
2005.

Other blogging vendors will thank them for introducing their users to blogging, otherwise not that much will change.

Update: Launched. Here's my demo space. Its like AOL Journals with lock-in, but a good fit if you use all of the following: Passport, IE, MSN Messenger, Hotmail, Windows Media Player. Trackbacks are on by default, pointing to other MSN Spaces. More private groups require Passport or MSN Messenger membership for all. Public use demands the latest IE from your readers. All the features invented elsewhere, and its still not easy enough to use. I think this is all fair to say, pains me to say it as there are people behind it. But watch this space.

Even More: This post was the first ranking for "MSN Spaces" during launch on Google and MSN search. Indexes have churned since then, but event people are here for something definative, the ongoing saga is one of censorship. Readthis and that.

I have to say the most amusing thing over the past few days are the faux-items on Target and Amazon (reviews are a must-read). This could be viewed as half-baked incursions by disgruntled engineers, a PR Crisis, or an opportunity. Are these not the Fakesters of retail?

I'm only partially kidding. If e-Tailers could enclose user-created faux-goods in a category that side-steps decency issues, these hacks would have commercial purpose. More people-centric commerce sites like craigslist already get this benefit, and their community is all the richer. This is but a pipe dream, as decency is an issue of the day and trusting your customers is alien to the enterprise.

November 29, 2004

I generally find from conversations that there are those who believe innovation stems from core teams under pressure and those who think it spawns from loosely connected networks. These are very different views of the universe, beyond how it may change. One is Ptolemaic, revolving around a person or team. One is Copernican, recognizing it doesn't revolve around your organization. More on the greeks later, for now lets turn to what's new in the daily dish, according to some network surveyors of Ivy affiliation:

Fleming and his colleagues found, for example, that at the end of the last decade, half of the patented inventors in Silicon Valley could trace an indirect collaborative path to one another...

"Our work and more recent work on knowledge diffusion demonstrates that knowledge flows along these collaborative relationships, even years after they were formed," says Fleming. At the same time, the world of inventors "is getting smaller," he says, "inventors are more connected to their colleagues in outside firms, and that knowledge is diffusing in both directions."

Fleming uses the analogy of a cave to describe network clusters, which reminds me of Plato's cave -- where your reality is what you perceive, or what you perceive could just be a reflection of what's outside the cave you are trapped in unknowingly. In other words, its more than fine to be trapped in an echo chamber so long as you realize you are in one, the acoustics can't be beat.

Valdis Krebs taught me something simple that works two years ago. That a healthy network has both a densely linked core and a dynamic edge. New ideas have to reach the network and then have an efficient means of processing it. Formulated memes need means.

A big part of my Copernican Universe for this post is from the Guardian's Simon Walderman:

The real danger for newspapers - and indeed all traditional media - when venturing online, isn’t these detailed questions about who charges for what, or what an individual site’s impact is on an individual publication. It’s that the media owner involved fails to understand their role in the online universe, and fundamentally fails as a result of it.

But its late, and the Earth has already revolved in Simon's favor. So, to make sure I have the right three old greeks, I'll beg a question.

I'll assume you feel your world is getting smaller, what have you done to make it bigger today?

Since I haven't been blogging about blogging enough lately, allow me to share Alex Pang's comments on Pro-Ams -- people pursuing amateur activities to professional standards -- which is covered in a British think tank report:

In the past few years, we've seen a number of claims that new
technologies or technology-enabled phenomena are leveling the playing
field between professionals and amateurs. The interpretation of
blogging, and in particular of political blogging, as a bottom-up
response to professional journalism is but the latest incarnation of
this trend-- though it's interesting to note that this is an occasion
in which the term "professional" is used as an epithet: it's right up
there with "elitist." (I've also written about blogging and the
Victorian concept of the amateur here.)

Perhaps the civility that Anil is complaining about calling for, is setting Pro-Am standards. Or maybe it just wanting to live in a good neighborhood.

But while the gains of
the orange-bedecked "chestnut revolution" are Ukraine's, the campaign
is an American creation, a sophisticated and brilliantly conceived
exercise in western branding and mass marketing that, in four countries
in four years, has been used to try to salvage rigged elections and
topple unsavoury regimes.

Funded
and organised by the US government, deploying US consultancies,
pollsters, diplomats, the two big American parties and US
non-government organisations, the campaign was first used in Europe in
Belgrade in 2000 to beat Slobodan Milosevic at the ballot box.

The US Government spent $41m on Milosevic and $14m so far in Ukraine. You might recall what the Right dubbed Chinagate, when Clinton was indirectly linked to campaign contributions from the Chinese government -- viewed by many as an infringement upon sovereignty. Personally, I believe sovereignty is an outdated nation-state concept in an interdependent world -- with some very big caveats: transparency, rule of law and influence is only through the democratic process.

If campaign practices developed by the Dean Movement could be exported to emerging democracies, it would be a very good thing. Not that its too late to save our own democracy.

November 27, 2004

UPDATE: Two years later, in January 2006, the iPhone was launched. Wifi included, and much more. Development took 2 1/2 years so I failed to predict both the development and launch. This should reshape another industry, if it opens up unlike prior mobile platforms.

My Netgear hotspot crapped out on me prompting a new purchase. My Airport Express proved its worth while traveling, even serving as the emergency hotspot for a conference without wifi, but it lacks an out port for my LAN. When faced with the choice of new base stations, I must admit I went with the Airport Extreme Base Station -- because of their proprietary network overlays to extend range, print and play music.

I had tried to extend the range of my non-Apple base station with the Airport Express to no avail. Was worth the premium I paid to do so, and now I have extended range from the base station while playing iTunes to my stereo in the other room via Airport Express.

Apple's network effects work so well I am a hooked worm and want more. Russell thinks podcasting will move to mobile phones. Not that he is wrong, but Apple will not develop a phone. But I will eat my hat if they don't offer a wifi-enabled iPod to let you play directly to your Airport Express. You can sort of do this today, and there are hotspot directories you can load on the iPod plaform. Others bet this will happen too, but as a new-fangled remote.

Update: Russell creatively thinks Apple will launch iPhone, but, again, they have network platform effects in wifi, so I would bet the above comes first. That is, until smart radios are a commodity and the software value add is a user experience of bridging networks.

"What have we had? We've had mobile voice, which was the lead
application and still is the lead application. Texting,
person-to-person, one-to-one messaging. And, recently, the only
dominant functionality that we've added is the camera. We need new
innovation on this platform for it to grow."

Second, how the most promising and compelling software innovations have always been born in the hands of playful users.

Third, on phones, like the internet, innovation springs from the bottom-up where the platform is open. SMS began as a signaling technology (Basically, a text-based way of saying "you've got mail.") adapted for mainstream communication by users themselves.

The boom of what Ahtisaari calls "personalization hacks" followed much
the same path. The industry certainly hadn't predicted such boundless
enthusiasm for sounds, graphics and themes but quickly capitalized on
the excitement once they realized, as Ahtisaari explains, that
"personalization has an intense value and people are willing to pay for
it." Ringtones are the most promising form of content to emerge this
way so far; users now pay up to three dollars for a ringtone compared
to 99 cents for the entire actual song from which it was derived. It's
the kind of phenomenon that is essentially unpredictable and would seem
absurd to any business development department. In terms of social currency,
however, it makes absolute sense: a ringtone is a way of sharing music
instead of simply listening to it. But such observations are a lot
easier to make in hindsight, once the user base has gone ahead and
hacked their way to the most sensible and creative applications of the
technology we've sold them.

Ahtisaari seems to be at pains to remind an industry now gloating about
the profitability of ringtones that they really began as a hack. It was
back in July of 1999
that a 23-year-old British phone hacker realized how a feature on Nokia
handsets allowing companies to create tones and graphics could be
hacked by users to add their own ringtones. Once the industry caught on
and created easier ways for everyday users to exploit the same code as
the hacker community, the market surged from fringe to mainstream in
less than a year.

...If I was a Nokia or a Hewlett-Packard, I would take a fraction of what
I’m spending on those buildings full of expensive people and give out a
whole bunch of prototypes to a whole bunch of 15-year-olds and have
contracts with them where you can observe their behavior in an ethical
way and enable them to suggest innovations, and give them some
reasonable small reward for that. And once in a while, you’re going to
make a billion dollars off it.

Douglas points out that most hacks are not in the commercial interest of the platform, but the reward of tapping into the bottom-up outweights the risks. The challenge for the marketing function then becomes managing middlespace. What innovations in, and that serve, the longtail should be developed for the mainstream? Sometimes the adoption pattern's momentum will make these investment decisions clearer. Sometimes it takes an understanding of the portfolio of options, both of diversity and combinations over time, to see potential. But this is managing emergence, for which there is barely a practice and where attempting to manage instead of sensitively lead can be folly.

Mass customization used to be a way to divide the spoils of the late majority at significant risk and cost. Platform architecture that mattered less when optimized for the tornado of growth that proceeded it was essential for economies of scope. Now the cost for open network effects has fallen for a new interplay between the long tail and TLC. Mass customization and personalization is so valuable that users as developers take it on themselves. A product splinters into a thousand derivatives along the long tail. Each new one proceeds along its own technology adoption lifecycle, and the challenge for the platform owner is which to accelerate. Each is an option, where the option didn't exist before.

Finally, non-pirate peer-to-peer file-sharing systems exist. Weed, perhaps the best, has
been designed to both encourage wide/easy distribution of music and
provide artists with the money they're due, by having a file format
that allows a downloaded song to be played three times for free and
then requires payment for that song. It also gives prolific aficionados
kickbacks: if someone else buys a song they downloaded from you, you
get a percent of the proceeds. Most titles are about $1, but it
varies--Weed says "The artist decides what to charge". According to Wired,
Weed only keeps 15% of the song price; however, they don't need to make
much money per file, because they outsource their infrastructure to
their users. Such outsourcing to the end-user is an important
Worldchanging trend that we'll see more of in the future. Other legally-paying P2P networks are AltNet and soon-to-be-launchedPeer Impact.

That and Skype(Out).

Weed has an eBay storefront where I snagged some Tosh for $1.50 in the Fat Tail.

But its a .wma? That doesn't play in any player. And they are not on the Mac Network.

Scoble, my friend, I think you have confused two curves. You don't get a long tail by taking the technology adoption lifecycle (a diffusion of technology adoption segmented by standard deviations from innovators to early adopters to chasm to early majority to late majority to laggards over time), by folding it in half and paying attention to the skinny leftover pigtail. One is the diffusion of a technology product by psychodemographic profile, one a diffusion of products by volume.

Microsoft, Apple and Google focused on innovators first. Google makes money through the long tail by arbitraging network economics. Microsoft doesn't grok wikis, no comment. Apple is still for innovators, that's why we pay them more. The Tablet PC will never be for the long tail, its for the 20%, but it hasn't crossed the chasm.

Once you grasp the long tail, you discover markets and users that
didn't exist because search and transaction costs were too high. All those things people thought you couldn't make money from, but, suprise, they are, like social software...that's the long tail.